It’s Not Just Semantics: Managing Outcomes Vs. Outputs

Immersive Van Gogh Exhibit at the Arsenal Contemporary Museum, Montreal

This post was originally published in Harvard Business Review (ages ago, but still relevant). It has been getting a lot of re-reading lately so I thought I’d repost it here. The difference between outcomes & outputs is still critical! ~~~~~~~~~~~

What’s the difference between outputs and outcomes? Some think the question is merely semantics, or that the difference is simple: outputs are extrinsic and outcomes intrinsic. I think otherwise; the difference between outputs and outcomes is more fundamental and profound.

In the non-profit world, outputs are programs, training, and workshops; outcomes are knowledge transferred and behaviors changed. In the for-profit world, the distinctions are not always so clear. Let’s define outputs as the stuff we produce, be it physical or virtual, for a specific type of customer—say, car seats for babies. And let’s define outcomes as the difference our stuff makes—keeping your child safe in the car. Borrowing an example from the Innovation Network, a highway construction company’s outputs are project design and the number of highway miles built and repaired. Outcomes are the difference made by the outputs: better traffic flow, shorter travel times, and fewer accidents.

Outcomes are the benefit your customers receive from your stuff. This starts with truly understanding your customers’ needs—their challenges, issues, constraints, priorities—by walking in their shoes and in their neighborhoods, businesses, and cultures. See what’s inconvenient, taking a lot of time, money, and/or effort. Your customers are too busy to plan, shop for, and cook healthy meals. What if you made a healthy, reasonably priced, fast-cooking meal so a family could eat better? Create a solution that your customers can sustain, and you enable life-changing outcomes, big and small.

Immersive Van Gogh Exhibit at the Arsenal Contemporary Museum, Montreal

Outputs are important products, services, profits, and revenues: the What. Outcomes create meanings, relationships, and differences: the Why. Outputs, such as revenue and profit, enable us to fund outcomes; but without outcomes, there is no need for outputs.

Steve Denning makes this distinction exceedingly clear in his emphasis on the outcome of delighting our customers instead of just making more stuff. Steve encourages us to tell stories about our customers, about who they are and what they want, so they can achieve.

Let’s take the story of Deb, who wants a new car and is very busy. She’d like to buy a car from a dealer who will make buying and, more importantly, servicing the car as easy as possible. She doesn’t have the time to wait at the dealer while the car is being serviced—or even time to get to the dealer for service. Since she travels, she’d like to go on a trip and have the car serviced while she’s gone. What if a dealer picked up and serviced her car, returning it all clean and detailed, without Deb having to alter one moment of her schedule?

Another story, for example: A food company has a new product, all the s’more ingredients in a box, and wants to make a big splash for the upcoming spring and summer seasons—but it’s up against some formidable competitors in the market whose brands are synonymous with s’mores. What if a packaging company could help them strategize not just how to package the product for higher acceptance into the mass retail markets, but also where to place it on store shelves to get the most exposure?

Yayoi Kusama, ICA BostoN

Through stories, we are able to empathize with our customers and recognize the outcomes they need. Business in the 21st century needs more focus on outcomes than outputs. We all can see where focusing on outputs got us: In education we’ve focused on test results (outputs) and ended up with some high-scoring kids who don’t know how to apply what they’ve learned to the world at large (outcome), like how the reasons leading to the American Revolution are similar to those that led to the Arab Spring. We have a plethora of apps for our smartphones and tablets (output), but how many do we consistently use—and how many actually improve our lives (outcome)?

We may not yet have all the right tools, methods, and processes to recognize and measure outcomes, but that’s no reason not to try. Let’s create them together while we change our world.

What if You Tried Risking It?

Yuna Hur & Elaine Cheung - Versions of a Retail Pop-Up, Spring 2018

I’m honored to host a blog by one of my amazing mentees, Yuna Hur ‘18. Last year, as a senior, it was time to push academic limits 1 last time before graduating. This is her story about why it’s so important to take risk … because you never know what can happen! Thank you, Yuna!! *

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Top: Elaine Cheung, Yuna Hur, students & Critiquers for ENGN 1971

May 2019: It has already been a year since I was persuaded to take a class Deb introduced to me my second semester senior spring [2018]. The class was called Iterative Design of Retail Value Propositions and Experiences - a blend of design and engineering. I never took courses related to business nor art, as I concentrated in cognitive science and education studies. My coursework had primarily focused around the topic of how people learn, both from a cognitive - neuro & psych perspectives - as well as an applied standpoint in my classes in the education department. I was in a good spot with regards to my concentration requirements. Like many other seniors, I was looking at loads of classes across departments. I asked Deb what time and how frequently the course would meet, and she said it would be once a week. If I’m honest, that was a huge selling point - again, because it was senior spring, though there was a huge part of me that was feeling incredibly insecure and unprepared for the course... no background in any of the topics that the course described. Nonetheless, because who can turn down Deb (?!!!?!!), I signed up for the course, not knowing what to expect, who’d be in the class, and how prepared I’d be for this mysterious course.

Here are 5 (of many) takeaways from taking this class (in no particular order) which are important for life beyond college:

1. Have a plan and be flexible - I started out the course thinking in my perfectionist mindset -- craving to find and work towards THE ideal solution. In this way, I have found myself digging deeper into details that were all uncertain because there was no singular “final answer”. I experienced a shortcoming from the expense of losing sight of what I initially set to work towards. Quickly, Deb convinced my perfectionist-self to take this class pass/fail -- and NOT just because it was my senior spring. This has been one of the best decisions throughout my time at Brown because it gave me permission and room to be okay with uncertainty, be okay with taking risks, and be okay with using my imagination.

2. Value collaboration with individuals from diverse backgrounds - In this class, students came from a variety of concentrations, ranging from International Relations, Architecture, Sociology, Applied Math, Engineering, Economics...etc. My partner studied History of Art and Architecture, and I studied Cognitive Science and Education. We each brought different skills, as she shared her keen eye to visually display her reasoning, and I shared my systematic reasoning in informing detailed decisions we made for our project.

3. Be human-centered - When thinking of different personas for the start-up the class was based on, there was no “one-size-fits-all” mold. My partner and I worked to create very different personas by pulling from our vastly-different experiences and socializations. This process, in-it-of-itself reminded me of how meaningful the individual experiences we bring to the table are. Developing these personas and then the different variations of the start-up’s pop-up store served as a reminder to know and expand intentional awareness to context-specific situations.

4. Seek intentional feedback - Throughout the course, each group had consistent opportunities to pitch the progress they’d made to the class. Following each group’s presentation, there was always time dedicated for individuals to share thoughts, ask questions, and for presenters to ask and respond. I appreciated these interactions because the feedback I’d receive was immediate, relevant, and specific so that I would leave class with tangible things to work on for my ideas to continue growing.

5. Trust your inner voice - During the first weeks, there were students from so many concentrations and with such awesome experiences. I was fangirling my classmates’ eloquent and thoughtful insights in awe of feeling like they were all so much better qualified for this course than I was. Students who were studying visual arts, for instance, had created aesthetically-pleasing vision boards, while students who were architecture concentrators precisely measured out floor plans. I didn’t feel confident in my ideas because I didn’t feel like I was good enough on understanding the business or design sides which the course was centered on. But what I was realizing throughout the course was that the value I was adding was the people-centered cognitive science and education background to my work. This was a rare moment in my educational experience where I relied on my intuition to brainstorm, create, and deliver the thousands of decisions that were made throughout the process.

Kathy Spoehr, me, Yuna

I thank and am forever grateful for Deb, Barbara, and all of my classmates who I played with, explored with, and grew with together. These five takeaways have been incredibly valuable to the work that I not only engage with today but also in my future work -- which is uncertain AND exciting!

*In true serendipity, Yuna’s advisor taught me one of my first Cognitive Science classes 1st semester my freshman year, Kathy Spoehr. Generations of strong, bright women!!!

What do Blue Lobsters Have to do With Innovation? Everything!

Blue Lobster at the South Bristol Coop, 2004

What’s with blue lobsters? Well, a blue lobster is rare, about 1 in 2 million, and very beautiful.  To me, a blue lobster is a person who views and organizes the world differently, who rejects the status quo, who loves to try stuff, learn, fail and try again, who is interesting because they are interested and who has impact .  When you get enough of them together, you create a blue lobster organization – one that creates positive disruption. 

It is incumbent upon us, whether we’re a blue lobster or not, to find, nurture and develop blue lobsters.  Why? Because the key to innovation isn’t processes, stage gates, weird exercises, or competitions.  The key to innovation has been and always will be People. People who view the world differently. Blue Lobsters.

I view the commitment to innovate, in the companies I’ve worked for and with, as a spectrum of lobsters - from cooked, to live, to rare blue ones.

Red Lobsters think they innovate and believe they want to, but not enough to expand their comfort zone and hire the right people to do it. They think they’re innovative because they make something in green instead of just red, but they stick with their industries, markets, customers, and (usually dying) business models.  In some cases, they are doing pretty well, so there isn’t sense of urgency.

Frankie B. Jr. - Bought 7/13/17 at Hannaford’s Grocery, Damariscotta, ME & freed off our dock on Pemaquid Harbor, ME

Live lobsters have pockets of innovation in the organization and/or people assigned to be the corporate innovators.  Innovation may be a designated job residing in a small part of the organization instead of throughout the culture.  This group may or may not be able to spread and have impact...but usually isn’t enough to become blue.

Blue Lobsters are just plain innovative. You can’t stop them. They ooze it from their pores. Attracting, hiring and developing blue lobsters is in their DNA. They know now to nurture and encourage blue lobsters so they are always growing and impacting the lives of their employees and customers.

I used to think if an organization worked hard enough, tried enough things, read and adapted the latest “best practices”, it could become innovative. Not anymore.  It’s not processes, it’s people. You need blue lobsters to make an organization (more) innovative and change a culture … and maybe even create blue oceans!

“The key to innovation has been and always will be People”

So, how do you become a blue lobster company? It starts from the top. The CEO either has to be or love Blue Lobsters, to be willing to invest not just money, but diligently invest his/her personal time, effort and social capital, finding and developing Blue Lobsters as well as assuring the culture will accept them. I’ve never seen innovation take hold, consistently, if it’s not embraced, nurtured, desired from the top.

“Adult” Blue Lobsters at #BIF2017 (Phil Komarny, me, Matt Fritz, Dany De Grave, Angela Blanchard, Christopher Rice, Jon Follet, Nick Barendt, Vala Afshar

This means getting some blue lobsters into the C-Suite, mentoring and nurturing them AND developing live lobsters so the core keeps running excellently and, moreover, may turn live lobsters blue!  One of my clients is doing this with their “Blue Lobster Leadership” program (seriously, that’s the name!).

Do you want to find some blue lobsters? Are you one? If you’re interested, ask me. I have some ideas and I know some places they tend to hang out.

And please, remember, it is incumbent upon us to find, nurture and develop blue lobsters, because perhaps that way, they’ll be less rare, and we can have more impact on our world.